As revisions on global crude balances become available, we like to dive into the data to attempt to extract insight as it relates to the tanker markets. With a new year beginning, we are still in a very volatile environment, with a pandemic that lingers and new variants like Omicron once again generating more questions than answers for the global economy. On top of that, inflationary pressures, high energy prices and supply chain bottlenecks, all add to the uncertainty surrounding economic recovery in general and the tanker markets more specifically.
The latest data from JBC Energy reveal that the global ...
LR2 Demand to Find Support from Physical Balance Developments
Dec. 17, 2021
Staying on the theme of preliminary findings from our upcoming 2022-2026 Tanker Market Outlook, we focus this week’s highlight on LR2 ton-mile demand from the Middle East to the West, particularly to Europe. For 2022, we project a 6.0% increase in ton-mile demand on this trade, with growth stabilizing at about 5.0% year-on-year throughout our forecast period (Figure 1).
Recent data from JBC Energy reveals Northern Europe distillate demand to outpace parallel supply additions from the Continent’s refining complex. The impact from gas-to-oil power generation requirements is likely to remain in place for the short-term and ...
Caribbean Flows and Suezmax Demand
Dec. 10, 2021
As we are preparing our long-term forecasts for our upcoming Tanker Market Outlook, we want to take a look at some key developments in regions and tanker classes of increased interest. One of those is the Caribbean, a region that is poised to see some ton-mile demand growth due, among other factors, to the developments in Guyana. In fact, Exxon’s FPSO “Liza Unity” has reached the country in late October and according to the company is going to come online sometime in early to mid-2022, adding up to 220,000 b/d of additional production.
This is positive news ...
US SPR Release and Crude Flows
Dec. 3, 2021
OPEC and allies reluctantly agreed to maintain the path of gradual, 400,000 b/d per month increases in their latest meeting that was concluded this week, although the organization stated that it could meet again if market conditions dictated it. Perhaps one of the deciding factors has been the mounting pressure from the US to open the taps in order to slow the crude oil price rally and ease some of the inflationary pressures in the country, especially on gasoline prices. To the same end, the US has also announced that it will release quantities from its SPR although ...
One characteristic of the current year is that global refining capacity is shrinking by close to 638,000 b/d according to the latest data from JBC Energy (Figure 1). We have observed closures and conversions increasing since 2020, with the bulk of the reductions transpiring in Northern Europe as the region is intensifying its decarbonization push and the move away from fossil fuels. A similar story is developing in North America, this time around the US West Coast where refinery consolidations and conversions to biofuels production facilities have also become prominent this year.